Archive for March, 2012
March is Fraud Prevention Month. On March 5, 2012, the Competition Bureau issued the following tips for consumers to protect themselves against fraud:
Be vigilant when evaluating ads, whether for a job, a product or service offered online, over the phone or in print.
Before sending money or giving credit card or account details, be sure you understand what you are agreeing to. Do not feel pressured into paying for a product or service because of threats that your credit rating will be damaged.
Know who you are dealing with. Be wary of any unsolicited phone calls, emails, text messages or letters from unknown sources.
Search for the company, the individuals, the product or the offer on the Internet, and verify any contact and company details.
Earlier today, the British Columbia Securities Commission announced that it had issued a notice of hearing alleging that two former directors and officers of a Vancouver-based group of companies (the Freedom Investment Club) committed fraud (see: BCSC Executive Director’s Bulletin: Securities regulator issues notice of hearing alleging fraud against former President and CEO of Vancouver group of companies).
In making the announcement, the BCSC said:
“The notice alleges that Michael Patrick Lathigee and Earle Douglas Pasquill perpetrated a fraud on investors in companies belonging to the Freedom Investment Club (FIC), a group of companies jointly controlled and directed by Lathigee and Pasquill. The companies in question are: WBIC Canada Ltd. (WBIC); FIC Real Estate Projects Ltd. (FIC Projects); FIC Foreclosure Fund Ltd. (FIC Foreclosure).
Both Lathigee and Pasquill were residents of Vancouver during the relevant period.
By early 2008, FIC had taken on significant debt in relation to several Alberta real estate properties it had acquired and was attempting to develop. All of the loans included guarantees from other FIC companies. Also at this time, Lathigee and Pasquill were aware that FIC as a whole was, in their own words, “in a very bad situation” and “close to insolvency”, but chose to keep this information confidential and instead focused on raising money in an effort to “save” FIC.
Between February 1, 2008 and November 15, 2008, Lathigee, Pasquill, WBIC, FIC Projects and FIC Foreclosure aggressively promoted and distributed securities that they represented as individual investments: approximately $20 million was raised in aggregate from over 600 investors in these three companies. The notice alleges that Lathigee and Pasquill did not disclose that the FIC was close to insolvency and that the investments were therefore extremely risky, instead choosing to promote investments in their companies as spectacular opportunities with enormous profits, thereby perpetrating a fraud on investors of WBIC, FIC Projects and FIC Foreclosure.”
On March 1, 2012, the BC Supreme Court released its decision in Tjelta v. Wang (2012 BCSC 299) (see: Tjelta v. Wang 2012 BCSC 299), in which the plaintiff was awarded damages of $20,000 for defamatory statements made in e-mails and other communications.
This recent case is a good illustration of the importance of ensuring accurate e-mail and online communications. The case is also a good update on the law of defamation in British Columbia.
Generally speaking, a plaintiff in a defamation action is required to prove three things: (i) that the impugned words were defamatory (i.e., that they would tend to lower the plaintiff’s reputation in the eyes of a reasonable person), (ii) that the words in fact referred to the plaintiff, and (iii) that the words were published (i.e., communicated to at least one person other than the plaintiff).
Helpful for plaintiffs is the fact that falsity and damage are presumed in defamation actions. Also helpful to plaintiffs is that they are not required to prove that a defendant intended to do harm or was careless (i.e., defamation is a “strict liability” tort). Where a plaintiff establishes the necessary elements, the onus or burden then shifts to the defendant to prove a valid defence to escape liability.
The Tjelta v. Wang case involved allegations of defamation in a series of emails and letters following a failed business relationship (a financing) to the plaintiff’s friends, family members, neighbours, business associates and other investors.
Statements made in this case included references to the plaintiff’s tax status with CRA (an alleged fine) and to him as a “blood-sucker”, “selfish, greedy and mean”, “dishonest”, “misleading” and “unethical”, among other things.
Our friend and colleague Marius Adomnica (Gratl & Company) has written this good case note on the recent Tim Hortons class action case in Ontario:
The Ontario Superior Court of Justice recently released its reasons striking the Plaintiffs’ claim in Fairview Donut Inc. v. The TDL Group Corp., 2012 ONSC 1252, a widely reported Ontario class action arising out of a conflict over how the donuts in Tim Hortons stores are prepared.
Among the claims dismissed were claims the Plaintiffs had brought under the Competition Act.
While Tim Hortons donuts were traditionally baked from scratch in each individual store, in 2002 Tim Hortons partnered with an Irish company to establish a manufacturing plant that makes frozen, pre-cooked donuts and sells them to individual franchises, eliminating the need for the donuts to be baked from scratch at each store.
A number of dissatisfied franchise owners brought a lawsuit against Tim Hortons over this change, arguing essentially that the price they were required to pay for these donuts under their franchise agreements unfairly cut into their profits. Among other claims, the Plaintiffs argued that the company’ actions violated sections 61 (Price Maintenance) and 45 (Conspiracy) of the Competition Act.
The U.S. Federal Trade Commission (“FTC”) has published a very interesting list of top 10 consumer complaints:
1. Identity theft:
On March 1, 2012, the U.S. Department of Justice announced that Yazaki Corporation had plead guilty to three counts of bid-rigging under the U.S. Sherman Act and agreed to pay a fine of USD $470 million (see: U.S. v. Yazaki Corporation Plea Agreement).
This case relates to an ongoing global investigation of bid-rigging in the automotive parts industry and coordination among competing auto parts suppliers to rig bids for automotive wire harnesses and related products, instrument panel clusters and fuel senders sold to U.S. and international auto manufacturers between 2000 and 2010. There is currently some debate as to whether this global auto parts cartel may prove to be the largest in history.
According to the plea agreement in this case, officers and employees of Japanese firms, including high-level personnel, conspired with competing auto parts manufacturers over a ten year period, which included meetings in the United States and elsewhere to allocate markets for the sale of auto parts (in the case of this particular firm, involving over $2 billion in sales).
The defendant agreed to pay a fine of USD $470 million.
New (2012) advertising, competition/antitrust, cartel, trade and class action law books from Oxford University Press:
The Class Action Playbook – Brian Anderson and Andrew Trask
From OUP:
“The Class Action Playbook is a unique and strategic “how to” guide for practitioners seeking to bring or defend a class action. Every important issue is addressed, including the initial shape of the proposed action, choice of forum, case-management schedules, pre-certification discovery and motions activity, briefing and argument of the class-certification motion, class notice, preparation for trial, class settlements, and the binding effects of class action judgments.
Experienced practitioners Brian Anderson and Andrew Trask analyze what decisions the plaintiff and defendant must make at each stage of a proposed class action, and the considerations that might drive different strategies at each stage. The authors explain the importance of every issue, the choices available to each side, and the factors each side should consider in choosing the best path to follow.
This Second Edition covers six relevant cases from the historic 2010 and 2011 Supreme Court terms; official commentary on class actions with citations to the new American Law Institute’s statement of the Principles of Aggregated Litigation, and where it upholds plaintiffs’ or defendants’ arguments; a discussion on emerging class action litigation tactics, including the use of arbitration clauses and the use of motions to strike class allegations; new appellate-court trends in class-action law, including developments in adequacy of representation, superiority, and use of experts at class certification.”
For more see: OUP: Class Action Playbook
A few days ago we posted a short note describing the Royal Bank of Scotland N.V. (Canada) Branch (“RBS”) obtaining a stay in Ontario Superior Court to produce documents under section 11 orders obtained by the federal Competition Bureau (the “Bureau”) (see: RBS Wins Stay in LIBOR-TIBOR Price-fixing Case).
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
